No image processing occurs after deployment (Cloudflare Pages)

Info

• Operating System: Darwin
• Node Version: v18.18.2
• Nuxt Version: 3.8.0
• CLI Version: 3.9.1
• Nitro Version: 2.7.0
• Package Manager: npm@9.8.1
• Builder: -
• User Config: modules, nitro, experimental
• Runtime Modules: @nuxt/image@1.0.0
• Build Modules: -

Reproduction

https://github.com/AaronBeaudoin/nuxt-image-issue-1

Description of Issue

In the reproduction above there is a minimal app.vue like this:

<template>
  <div>
    <h1>Nuxt Image Test</h1>
    <NuxtImg src="/cat.jpg" width="1024" quality="1"/>
  </div>
</template>

As you can see, the quality is set to 1. This is so that you can see very obviously that image processing is occurring. If you run npm run dev you'll see that the image looks like crap, so you know that IPX is working great.

But now, deploy the reproduction to Cloudflare Pages. After doing so, go to the deployed URL and you'll see this:

Obviously image processing is not working.

Start with the linked reproduction repository and its app.vue, then compare the output from npm run dev with the deployment on Cloudflare Pages. Trace the Nuxt Image/IPX path used after deployment and confirm that the deployed result performs the same quality-1 processing as local development.